“I want to get married but my fiance has bad credit, will their score ruin mine? I’ve been told it will – Never mind! Not ruining my credit!”
Slow down, it’s okay. Getting married doesn’t impact your score. Marrying someone with bad credit will not make your score worse. Credit scores are based on the individual credit profile. Sure – You start sharing a bed/meals/TV remote, that doesn’t mean you share your score.
Three ways it can affect your credit and what you can do to protect yourself:
1. Open a credit card together. You may be charged a higher interest rate because of their lower credit score. Don’t pay the bill on time? You both will be penalized.
Protect yourself: Add your significant to a card you have as an “authorized user”. This helps them build credit but keeps you in control. If things get out of hand, take them off your account.
2. Purchase a car together. The cost of credit may be higher since their score is lower. Fun Fact: Normally when two people buy a car together, the better score “floats” the other. Which means, together you would qualify for a better interest rate.
Protect yourself: Sign as a co-buyer and not a co-signor. A co-buyer has rights to the vehicle, a co-signor does not.
3. Get a house together. A not so favorable credit rating will result in a higher interest rate or maybe not even qualifying for a mortgage. Since a mortgage is 15-30 years, you want to make sure you qualify for the lowest rate possible.
Protect yourself: You may have to be on the mortgage alone. That’s a hard conversation to approach with a significant. Look at the bigger picture, it could result in thousands of dollars of extra interest, all because of a low score. It’s worth waiting, improving both scores to get a better rate – even if you rent for longer.
Bottom line: Credit files don’t merge when you get married. The habits of your future spouse can impact your score. Think things through together. Your other half knows what their credit is. Show some support and work to improve BOTH scores.